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Make a plan to eliminate debt

By Kemberley Washington · Bankrate.com
Tuesday, April 23, 2013
Posted: 4 pm ET

Is it possible to live in a world without debt? I ask myself that question as I continue on my journey to a life that is debt-free.

It is hard to escape credit cards. No matter where we turn, there are low interest rate promotions and store credit card offers to save a buck or two. And credit cards are necessary for everything from holding a hotel room to reserving a rental car.

I think there may be moments in life where it simply makes sense to borrow. But I also believe everyone can conquer their debt by following these steps.

Reduce debt, but increase income

When I found myself with too much debt, I decided to do something about it. I created a debt-reduction plan and listed all my debt from the highest interest rate to the lowest.

In addition, I created an income plan. I pondered several ways to increase my income, with the goal of using the extra money to pay down my debt.

You can do the same.

Establish new habits

To take control over your finances, eliminate unnecessary debt. This may seem easier said than done, but with a little planning, it can actually work.

Take steps to build your cash reserves, so your reliance on credit cards can be reduced and eventually eliminated. Just say no to new debt. And steer clear of habits that got you into debt in the first place.

Ditch the credit cards

It may sound simple enough, but leaving your credit cards at home is essential to conquering debt. Making a commitment to purchase items with cash only is a key step to eliminating debt.

Not only will reducing your debt give you a peace of mind, but it can help save you money, since you no longer will be responsible for making interest payments.

Once you get your credit cards under control, begin tackling larger amounts of debt, such as mortgages, auto loans and other costly loans.

Remember: your choice, your future!

Kemberley Washington is a certified public accountant and business professor. She writes a personal finance blog at Kemberley.com. Follow her on Twitter and on Facebook.

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